On The Money — Presented by Citi — Manchin stalemate leaves Biden bill on the brink of collapse

Happy Wednesday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: digital-staging.thehill.com/newsletter-signup.

Today’s Big Deal: President Biden is having little success getting Sen. Joe Manchin (D-W.Va.) on board with Build Back Better. We’ll also look at the Federal Reserve’s decision to speed up its tapering of bond purchases.

But first, some new JFK assassination files just dropped.

For The Hill, I’m Sylvan Lane. Write me at slane@digital-staging.thehill.com or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at njagoda@digital-staging.thehill.com or @NJagoda and Aris Folley at afolley@digital-staging.thehill.com or @ArisFolley.

Let’s get to it.

 

Democratic talks with Manchin show signs of melting down

Democratic negotiations with centrist Sen. Joe Manchin (D-W.Va.) over President Biden’s sweeping climate and social spending bill are close to melting down as Manchin appears to be backing out of an earlier deal with the White House to extend the child tax credit for one year.

Manchin is now floating the idea of extending the child tax credit for multiple years so that the cost of a proposal that is likely to be extended by Congress in the future is fully reflected in the Build Back Better bill, which is now officially projected to cost roughly $2 trillion over 10 years.

The snag: 

• Extending the expanded child tax credit a full ten years would cost $1.6 trillion over a 10-year budget window, according to the Tax Foundation, which would nearly equal the entire cost of Build Back Better as it was drafted by the House.

• That would force Democrats to either find new tax increases to offset the cost or jettison other popular proposals such as long-term home health care or expanded subsidies for child care to keep the total cost of the proposal close to the $1.5 trillion top line set out by Manchin in September.

Manchin on Wednesday angrily denied that he is opposed to extending the child tax credit. But he appeared to nod his head affirmatively when asked whether its projected cost over ten years, assuming that it’s likely to be renewed by Congress, should be reflected in the official Congressional Budget Office score for Build Back Better.

Alexander Bolton has the latest here.

 

Read more on the future of the child tax credit:

• The Treasury Department and IRS on Wednesday made their final monthly child tax credit payment under President Biden’s coronavirus relief law, as the administration and congressional Democrats push to enact legislation to extend the payments.
• Speaker Nancy Pelosi (D-Calif.) on Wednesday declined to entertain the possibility of Congress passing a standalone extension of the child tax credit if it isn’t extended through the social spending package before the end of the month.
• Manchin yells at reporter: ‘You’re bull—-‘

 

A MESSAGE FROM CITI

Tackling the startup world’s gender, race and ethnic funding gap.

With our $200 million Impact Investment Fund we are seeking opportunities to invest in businesses that are led or owned by women and minority entrepreneurs, helping to create equitable access to venture capital funding.

 

LEADING THE DAY

Fed to speed up taper, projects three rate hikes in 2022

The Federal Reserve on Wednesday announced a faster timeline for pulling back the stimulus it has deployed to support the economy through the coronavirus pandemic as inflation surges.

• The Federal Open Market Committee (FOMC), the Fed’s monetary policy arm, said it would taper its monthly purchases of Treasury bonds and mortgage-backed securities at a quicker rate than it laid out in November. 

• Fed officials also projected three interest rate hikes in 2022, accelerating their expected timeline for raising borrowing costs.

“With elevated inflation pressures in a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support,” Fed Chair Jerome Powell said in remarks following the announcement.

“In addition, a quicker conclusion of our asset purchases will better position policy to address the full range of plausible economic outcomes.”

I break it down here.

 

SALES SLOWDOWN

Retail sales growth slowed in November

Retail sales rose slower than economists had expected in November following three straight months of sharp increases, according to data released Wednesday by the Census Bureau.

• U.S. retailers and restaurants made $639.8 billion in sales last month, up just 0.3 percent from October and well below the 0.8 percent increase projected by analysts.
• Sales at department stores sank 5.4 percent last month and purchases at electronics stores fell by 4.6 percent, the Census Bureau reported. Sales by online retailers were flat, though sporting goods, hobby, music and book stores saw sales rise by 1.3 percent.

While a retail sales slowdown during the holiday shopping season would typically be cause for alarm, November’s tepid growth followed three straight months of expectations-beating increases. Even so, the slowdown could be signs of inflation weighing on household spending.

I explain here.

 

A MESSAGE FROM CITI

Tackling the startup world’s gender, race and ethnic funding gap.

With our $200 million Impact Investment Fund we are seeking opportunities to invest in businesses that are led or owned by women and minority entrepreneurs, helping to create equitable access to venture capital funding.

 

Good to Know

A majority of Americans say the federal government is doing too little to fix supply chain issues and reduce inflation, according to a poll published on Wednesday.

Here’s what else have our eye on:

• The Occupational Safety and Health Administration (OSHA) is fining Dollar General after completing an investigation into a store it says violated several federal workplace safety policies. 
• The nation’s biggest companies have steadily ramped up their donations to GOP lawmakers who voted against certifying the 2020 election results, largely ending the giving freeze instituted following the Capitol riot.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.{mosads}